Protein-rich portfolio supplement?

JeffClabaugh

On the theory that the biggest winners in any gold rush are the guys that sell the picks and shovels, the drug rush to fill coming revenue voids in the pharmaceutical business is creating a similar opportunity.

Internet Financial Connection profiles a company called Techne Corporation [s:tech], a company that supplies "cytokines", or growth factor proteins. Pharmaceutical and biotech companies use this stuff in research to make what they're working on does what it's supposed to do in the lab. The site quotes Bill Grierson of Koop Investment Advisors as saying what Techne makes is in big demand.

Pharmaceuticals companies are facing a lot of pressure because many big blockbuster drugs are scheduled to come off patent in the very near future. As a result, they're scrambling to find new drugs to replace their older products. The companies have been beefing up their research and development funding. Techne recently bought one of its competitors and, as a result, has been amortizing the acquisition; an accounting move that Grierson says makes earnings look less attractive on the surface. But he's putting a target price on Techne stock at 30 times forward earnings or 39 a share sometime within the next 12 months. Read the full story

Drilling for oil

If you heard about a stock that's up more than 100 percent in 4 months, would you be interested?What if the analysts were saying the rally was far from over? What if talk of a takeover was thrown into the mix?That's the case with Premier Oil, Plc.
PMO, +0.59%
which is admittedly not an Exxon or a Royal Dutch Shell. But according to Bloomberg's Taking Stock column, Britain's 8th largest oil producer has already climbed 114 percent since sliding to a six and a half year low in March, and Ragulan Sriskanthan says it looks set to surge further.

Premier's benefiting, like its big counterparts, from a 70 percent oil price rally this year, and that's boosting the value of its crude reserves and making it a potential takeover target. But it may be in a better position now that OPEC's production cuts appear to have taken hold. Premier took advantage of the earlier decline in oil prices to buy exploration rights at a time when rivals were cutting back on exploration. Srisklanthan quotes one analyst who says Premier has had exploration success and that's the best way to increase revenues; by being competent with the drill bit. As a result, Premier has the largest reserves, per market cap, of any major UK exploration company.

The company's reserves make it a tempting takeover target and it has already said it would consider an offer in the terms were right. Read the full story

Watch out for the Ricochet

See the guy at Starbucks with the laptop and what looks like an antenna attached to it?He's on the Internet, via wireless connection, and one of the ways to get there is through old fashioned radio waves. A service like Ricochet is available in a handful of major markets. A series of signal grabbing antennas scattered throughout a metropolitan area picks up what he's sending and moves it out onto the Net. Ricochet is a product of Metricom Inc.
mcom
and it's stock has suddenly jumped to life after word leaked that MCIWorldCom
wcom
and Paul Allen's Vulcan Ventures invested $600 million in the company.

At Interactive Week Online, Larry Barrett writes that the investments don't leave much left for the public to feast on. The deal gives Vulcan 49 percent ownership and WorldCom 38 percent. But that leaves 13 percent of the stock still out there, and for those who own it, or get a chance to buy it, they're looking at a money losing company on a fast track growth course that's now got the deep pocket backing of WorldCom.

Barrett says it's just another value added service for WorldCom to polish up and offer to its customers. For Metricom, Ricochet is the way of the future. It plans to offer a faster wireless service in 12 major cities soon, and by mid-2001 Metricom plans to have added 50 metropolitan areas to its Ricochet coverage. Ricochet subscriptions grew 37 percent last year and among its biggest customers are IBM
IBM, +0.64%
Xerox
XRX, +2.32%
and the Los Angeles Police Department. Read the full story

Don't blow a fuse

Here's a company that's a big behind the scenes player in the world of high technology and its product is as mundane sounding as a fuse. Bel Fuse Inc.
BELFA, +10.95%BELFB, +9.85%
is a 50 year old company that got its start making fuses for cars and televisions. Today it's bread and butter is the $500 million magnetic networking components market, accounting for more than 40 percent of its revenues. It's also a company that, despite a steady business and a clean balance sheet, is relatively unnoticed on Wall Street, according to The SmallCapInvestor. It names Bel Fuse it's stock of the month for that very reason.

Bel Fuse has more than 400 big name customers including Lucent, 3Com, GM and Hewlett Packard and SmallCap says it was recently named one of Investor's Business Daily's 200 best stocks, along side companies like Cisco and Microsoft. Bel bought Lucent's Power Systems Signal Transformer Business last fall, bringing it 100 years of Bell Labs' telecommunications engineering expertise and significantly augmenting its product line.

The company's net sales rose 23 percent last year. Earnings rose 72 percent. And its current backlog of orders totaled $33 million as of February, more than double its backlog a year earlier. The company's on hand cash exceeds its total liabilities and it lists no long-term debt. One big risk is where Bell does its business. Almost all of the company's manufacturing operations and 61 percent of its identifiable assets are located in Hong Kong, Macau, and China. So it faces the risks associated with doing business in those countries.

Bell also created two classes of stock last summer. Class A shares with voting rights and Class B shares with no voting rights but with an annual dividend. Class A shares have been trading higher but the market may eventually value Class B shares at an equal or greater price so the advice for long-term investors is to consider buying the cheaper, dividend paying, B shares. SmallCapInvestor says Bell Fuse shares could hit 36 to 50 within the next 18 months. Read the full story

AOL's Midas touch?

When America Online
aol
announced its "deal a day" strategy about a year ago, it sounded like a tall order to fill. It hasn't been. And every one of those deals seems to be greeted with investor enthusiasm for both AOL and for the source of the deal itself. Cases in point just this week. DrKoop.com
koop
and Autoweb.com
AWEB, +0.00%
both got boosts from announcing deals to get a position on AOL's magic board.

ZDNet's Sergio G. Non sees something out of whack with a company that gets paid by its content providers instead of the other way around. And Non says the latest deals show that investors may just be in love with anything AOLwithout giving much thought to the numbers. Drkoop will pay $89 million for a glorified advertising deal. And this is a company who's quarterly revenue hasn't even broken the seven-figure mark yet. Autoweb, which Non says couldn't even clear the low earnings hurdles set by its underwriters' analysts, is even less attractive. It merely gets an AOL"presence" not the billing and advertising help AOLhas promised Drkoop.

As for AOL's ability to generate earnings for its content providers, Non says prove it. Sportsline USA expects to remain profitless through all of next year, despite getting 40 percent of its weekend traffic from America Online.

Non says AOL's ability to continually boost its customer base has investors seeing a Midas effect in everything AOLtouches, but remember..."only King Midas got to enjoy the gold." Read the full story.

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